The state's Finance Department is monitoring a slide in tax revenues which created the $26-billiion dollar deficit in the first place. If the economy gets worse, it's likely we'll be back in the same situation by this fall. Something the Schwarzenegger administration says it's aware of.
"We're prepared to move quickly if we need to go to the governor and say we think things are changing rapidly enough that you ought to call an emergency session and put more measures before the legislature to close any gap," said H.D. Palmer with the Department of Finance.
To make matters worse, the state won't be getting the gas tax money it wanted from cities and counties. It also won't be getting revenue from oil drilling off Santa Barbara. The Assembly dumped both plans last week as conditions for passing the rest of the deal to close the state's deficit.
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